How to Eliminate the Top Operational Issues Faced by Hospitality Companies
As a leader at a hospitality company, you know that optimal performance doesn’t happen casually, and operational efficiencies don’t occur by accident.
Managing teams, communicating with stakeholders, handling everyday operational problems, and, most importantly, ensuring your guests are happy are just some of the significant challenges you face on a routine basis.
Add to this the everyday interruptions, annoyances of ineffective meetings, delays in receiving critical information or losing it, workplace politics and people working in silos, a lack of data to inform decision-making, duplication of efforts, failure to recognize guests effectively, and the inability to address guest concerns adequately.
It's not surprising leaders in the hospitality industry are actively seeking out proven strategies and tactics to run their businesses better. It’s the only way to move from a reactive culture to a proactive one and a non-strategic operation to a strategy-centric one. It’s the one way to go from chaos to teamwork and achieve success.
This article includes best practices Alpha Inn Management has developed for hotel management and communications, which we’ve learned and enhanced over time. This includes those that emerged over the last few years when hospitality organizations have been required to do even more with less, including:
Social media and rating-and-review sites putting businesses at constant risk over minor errors or misinformation
The labor market becoming record tight
The use of technology growing exponentially
The pressure to grow and become more efficient
And other factors in the workplace exacerbating communication issues.
Let’s take a deeper look at some of the key operational issues hospitality industry leaders face today.
Guest Satisfaction
In today’s world of higher expectations, hospitality practices, processes, and services that are inefficient, disorganized, or outdated will eventually result in unhappy guests and dissatisfied employees. Bad guest experiences and an unmotivated workforce will quickly and negatively impact your bottom line.
Let’s start with the elephant in the room.
How can you improve guest satisfaction?
A study published by Esteban Kolsky, CEO of thinkJar and an expert in customer experience, reports that attracting a new customer costs six to seven times more than retaining a current one. Replacing one dissatisfied guest is costly. Add to this the reputational harm a single negative review can have in attracting new customers, and you can see why guest satisfaction must be priority one.
Ensuring a positive guest experience requires having complete control over every aspect of it, including making reservations, delivering fantastic service across all areas of the operation, creating and maintaining a perfect ambiance, promoting health and safety, and other factors.
Of course, maintaining complete control over these things has become almost impossible for hospitality managers and executives – unless hospitality organizations are utilizing technologies that help track successes and identify team members doing things right.
All are typically managed through various software, systems, and devices. Add to that staying on top of guest satisfaction and responding appropriately to issues as they arise involves additional technology, including countless social media and rating and review platforms.
So, what can you do? Good hospitality leadership focuses on finding new solutions to end the spiral of organizational chaos and dysfunction. They do this by addressing issues and exploring options to improve performance including simplifying processes, connecting systems, and updating software and platforms to enhance overall management communications and results. Robust solutions like Alpha Connect are available. Don’t you owe it to the success of your operation to check them out?
Quality Control
Quality control is critical in all types of businesses — but especially in hospitality. An organization’s reputation depends on the quality and dependability of its service. Low-quality work and not recognizing best practices lead to rework and compromising resources from other efforts that ultimately negatively impact the guest experience. This can lead to bad reviews and lost customers. Identifying best practices and having well-thought-out processes in place can help identify, correct, and avoid issues before they become significant problems. In short, implementing best practices and effective quality control is a central component driving guest satisfaction.
One effective best practice method involves monitoring events and patterns during daily business operations. For example, if guests start complaining about slow service at the restaurant, management should be able to identify service delays quickly and immediately address any underlying issues before they escalate and implement corrective measures. It’s critical to have a central database or system where this information can be housed, generate service notifications, and be easily shared by managers and other leaders.
Quality control issues often stem from a status-quo, that’s how we do things here, mentality. To combat this, managers must encourage continuous real-time and long-term thinking, improvement, and innovation by promoting open communication and encouraging employees to share ideas and suggestions. It’s also critical for managers to have the tools needed to monitor performance, identify issues, and pass along best practices and corrective measure ideas among themselves.
Data and Analytics
Another critical challenge for hospitality leaders and managers is using data and analytics to make intelligent and timely business decisions. Something simple in many other industries seems almost impossible in the hospitality sector. The data needed to make informed choices is housed in multiple tens or hundreds of systems, dashboards, and reports.
What’s critical is for business leaders to align on the top key performance indicators to stay on top of constantly. For most hospitality operations, these include:
Guest satisfaction
Employee satisfaction and retention
Financial performance, such as like-for-like sales and profitability
Marketing and sales
Teamwork
Individual productivity.
These should be readily available through a single source, with other data accessible as needed. The revolutionary Alpha Connect app can help with this.
All hotel, restaurant, and bar group leaders must have best practices to also stay compliant with food, health, and safety regulations, on top of maintaining operational and brand standards. This work is necessary, but it can take much of your team’s time. Manual, paper-based processes and systems that don’t link up also leave room for human error, affecting your customers’ safety and satisfaction.
Like many things in life, daily procedures and checks can be made much simpler by using the right technology. Digitizing checklists, processes, and other paperwork, along with information from various systems and making them available to your team any place, any time, through any device, provides a clear picture of all their daily tasks and current issues.
Perhaps most importantly, site and area managers must have a clear overview of completion rates and issues and be immediately notified of any incidents so they can take action when necessary. This can help limit the impact of guest issues, employee difficulties, accidents, and other problems.
Without waiting, wasting time, and being required to constantly hunt through paperwork, emails, multiple systems, and different devices, managers can optimize their time use and focus on the issues that impact essential KPIs, sales, and customer satisfaction.
Team Development
An issue touching everything we’ve covered so far is team development, learning, and coaching.
Recruitment in the hospitality industry has never been more challenging, so retention is critical to guaranteeing high service levels and securing talent for the future.
Employee learning is fundamental to not only equipping your teams with the skills and knowledge they need to do their jobs effectively but also to keep them motivated to constantly improve and contribute so they’re not tempted to look for employment elsewhere.
Training is crucial for implementing best practices, eliminating inefficiencies across operations, and ensuring everyone knows their responsibilities, how to perform them, and how to gauge their performance against company standards. A well-trained staff eliminates the need for micromanagement, as employees are always aware of best practices, key policies, and procedures.
For a deskless workforce, having easy cloud-based access to learning modules always at the ready allows managers and supervisors to provide employees with the direction and insights needed to be successful. They can also be delivered in videos, which show workers how to do things right rather than simply explain how. Video demos are also more effective for the many non-English speaking employees working in the industry.
Your staff is on the front line, constantly interacting with guests, meeting their needs, and exceeding their expectations, which is paramount to driving growth. Engaged employees are motivated to meet and surpass performance standards and commit to making operations run smoothly and seamlessly. They don’t miss as many shifts as their non-engaged peers, have lower attrition rates, and are generally more proficient at their jobs and productive.
Well-trained and engaged workers need less supervision, which is critical for allowing managers to walk the floor, communicate with guests, have a more hands-on approach to leading their teams, and focus on implementing strategic plans for future success. Better engagement means greater value for the guest and hotel.
This is especially true regarding the only guest satisfaction statistic that really matters in the end: the desire to return and recommend.
Property level and area managers are the most experienced team members and play a crucial part in team development, as well as nurturing future talent from within.
A proven way to do this is through a culture where managers empower, coach, mentor, and challenge their teams.
Today’s best managers hire front-line people with future potential and then develop that talent into leadership roles. They set high-performance goals and allow their teams to thrive, supporting and coaching them as they work and grow.
You must provide managers with ready access to your company’s best practices and educational tools so they’re handy when teaching, coaching, or mentoring opportunities arise.
Improve Productivity and Reduce Labor Costs
In today’s hyper-competitive hospitality market, executives and managers are constantly pressured to improve productivity and reduce labor costs. Of course, the best way to do this is to implement best practices and ensure that staffing is both efficient and effective.
Managing staffing levels has also become even more complex as COVID-19 and workplace trends have reshaped the labor market. According to a 2022 American Hotel and Lodging Association report, 94 percent of hotels are understaffed, 47 percent are severely understaffed, and 96 percent report that they cannot fill open positions.
The issue — and it’s not news — is that hospitality businesses are subject to daily, weekly, and seasonal fluctuations, making team scheduling a nightmare. Not getting it right results in too much or too little staff, directly impacting customer satisfaction and business costs.
The key to success is to balance keeping staff lean while avoiding overburdening employees. Understanding and implementing best practices can ensure management makes the most of its resources while providing the high-quality experience guests expect.
The ability of hospitality managers to train and schedule staff effectively is directly impacted by the speed of organizational access to best practice information and systems to help anticipate appropriate staffing levels. If management has challenging or inadequate access to systems that help with staff training and scheduling, the impact on guest satisfaction and financial performance may be immediately subtle but more profound over the long term.
What’s critical to remedy this is for hospitality organizations to take advantage of current systems and software like Alpha Connect that can streamline the implementation of best practices, simplify employee training and scheduling, and facilitate communications across entire organizations. It’s the only way they’ll measurably accomplish the dual goals of optimizing productivity and improving financial performance.
On top of this, efficient systems and improved communications save managers time so they can focus on their planning, tasks, team, and customers. It can also provide employees with greater shift security, increasing retention.
Hospitality operators must also address employees performing tasks that do not directly contribute to producing revenue, referred to as labor leakage.
To fight against this, organizations should prioritize preventative measures over reactive ones, which are slower and can take longer to solve. The best-run companies tackle potential issues before they arise — especially those related to maintenance and staffing.
To reduce redundancy and unnecessary spending, managers and other leaders should track expenses diligently, conduct industry-level benchmark research, carefully manage variable costs, and get tough on fixed expenses. They should consider investing in a comprehensive system that pulls together all the metrics needed to track and identify areas to reduce redundancies and make cost-saving changes. A relatively small investment typically pays off significantly for companies that use them right.
Financial Performance – Driving Sales and Controlling Costs
Another significant pressure for hospitality executives and managers during this period of economic uncertainty and rising prices is driving sales revenues and keeping costs in control on a timely basis. Like many other issues they face today, a significant barrier is that hospitality organizations have too many disconnected systems, and it is a slow, delayed process to effectively review and analyze financial performance to make appropriate, timely strategic organizational decisions. Add to this communication inefficiencies, and economic performance becomes more the result of laggard versus timely strategic thinking. Companies that don’t take steps to modernize their stock management systems and create an effective communication ecosystem will fall behind their more advanced competitors.
Ultimately, operational inefficiency is due to a lack of collaboration. Poor communications rob hospitality executives and managers of flexibility, insight, and impact. They spend more time putting out fires than interacting strategically, spending more time with guests and their teams.
When that happens, guest satisfaction falls, and eventually, market share and revenue quickly decline.
Faced with this reality, it only makes sense to make a relatively small investment in systems and software like Alpha Connect, which can help prevent these issues through more effective team collaboration, improving access to important information and critical operational systems, centralizing educational resources and improving communications by consolidating them.
While non-customer-facing responsibilities like scheduling, inventory management, budgeting, and employee training are integral to operations, they don’t have to occupy most of your managers’ time and attention. The right technology can play a critical role in unlocking efficiencies by providing managers with centralized access to the data, systems, communication tools, functions, and other things they need to significantly streamline and improve day-to-day operations so they can spend more time interacting with guests and enhancing their experience with the facility.
The latest hotel management and communication software empowers executives and managers by placing critical data, tools, and solutions literally in their hands for use at any place and time. Every moment a manager spends running back to the office or searching for files and information is a moment not spent improving the guest and employee experience in some way.
Conclusion
Operational improvements can seem daunting. However, by picking the right battles and leveraging the correct technology, hospitality organizations can build momentum and realize significant operational efficiencies and improvements.
When implementing change, operators must listen to staff members and maintain a positive employee experience. As we’ve already covered, a highly motivated staff will improve the guest experience, employee retention rates, and engagement levels.
To ensure things are on track, consider deploying brief stand-ups daily for managers and employees, leveraging collaboration technology to share what happened the day before, updates, and issues that could hinder your improvement efforts. Also, recognize and reward success. When people work in a positive environment where their achievements are identified, they are likelier to try hard. Finally, constantly request employee feedback. Surveys and forums that allow employees to express themselves are imperative. They can help identify issues before they become significant problems.
Remember, the hospitality industry constantly evolves, with higher guest expectations, new technologies, innovations, and competitors trying to disrupt the market. It's essential to focus on identifying and closing efficiency gaps, eliminating communication issues, streamlining technology, committing to continuous improvement, and embracing technologies to simplify processes and improve guest experiences. It’s the only way your organization will survive and thrive in these rapidly changing times.
Get started on the journey today by checking out the revolutionary Alpha Connect app and connect with a friendly and helpful Alpha Inn Management representative today.